What is direct mail and how is it used?
Of all of the major types of advertising that businesses use, direct mail can be the most effective. The goal of direct mail advertising is to get the recipient to read it and act.
“I tried direct mail advertising once and it didn’t work.” I have heard those words hundreds of times from owners and managers of businesses. The fact is, all major advertising works when used correctly and at the right time.
Direct mail is often referred to as junk mail because most of it is thrown away by the recipient. In fact, only a small amount of direct mail advertising is read by the consumer. A typical scenario is a consumer gets his mail from the mail box and starts glancing over each piece. The mailers he has no interest in (which is most of it) are immediatly thrown into the trash. The ones of interest are kept and read.
When a direct mail campaign is sent, only ½ to 2% of the mailers are read, the rest are trashed. How can advertising be effective when almost all of the recepitants don’t look it? Simple, mail a large amount to get a large return. I’ll show you how in a minute.
Just like all advertising direct mail has advantages and disadvantages; a right way and a wrong way to use it.
Advantages of direct mail advertising
1. Targets customers better than any other kind of advertising, period.
2. Direct mail advertising is the only major kind of advertising where its effectiveness can be measured exactly. You know the exact amount of customers a business gets from each mailing.
3. Direct mail advertising works.
4. Direct mail is still a growth industry as apposed to traditional broadcast and print advertising. If it did not work, advertisers would not continue to use it.
It may not seem like very many advantages, but when it is as powerful as it is you only need one advantages, it works. All other kinds of advertising cannot reach a specific target customer, and only that target customer without “wasted circulation.” I will explain that in a moment.
Disadvantages of direct mail advertising
1. The cost per customer reached is very high.
2. You get a very small reach; typically ½ to 2% of the pieces mailed are read.
3. People think of it as “junk mail” so they assume it couldn’t possibly be effective advertising.
4. You usually need to mail large quantities to get much response.
5. You must obtain a specialized mailing list in order to reach the specialized target customer.
The goal of direct mail advertising
The goal of direct mail advertising is to get the recepiant to read it and ACT, meaning go to the phone and call the business, or to the Internet, find the businesses’ website and buy the product or service, or to actually go to the business and buy the product advertised.
The design of the direct mail piece
The design of the mail piece is critical to the success of the mail campaign. The direct mail industry has done more research on what causes people to respond than any other medium. They know which colors work the best. They know whether a post card or letter work the best. They know which kind of headline and copy (in advertising and publications the text is called copy) works best and more.
The kind of design used for a direct mail piece depends on who the target customer is and what you want him to do. Do you use post cards or a letter? Will one color of ink or four color process (full color) work best? What kind of paper should it be printed on? What should the headline and copy say? What offer will the mailer give? How do you want the recipient to respond? These are all critical elements that will affect the success of the campaign.
The mailing list is critical
The most critical element of a mail campaign is the mailing list. You must have an up to date list from which you are mailing including names their addresses. In most cases you can get a good list from either a list broker or a direct mail company. (You can find both in the yellow pages) You don’t buy a mailing list, you rent it. You pay for the list each time you mail to it.
The list must be clean
That means it must be up to date with the most correct addresses and without duplicates names. You must depend on where you get the list for its correctness. Use a well respected list provider.
How many names should you rent for a campaign?
Mailing lists are rented in groups of a thousand. Often there is a minimum amount of 5,000 names. The cost is based on a per thousand amount such as $25 per thousand etc. You can rent any amount from 5,000 to millions.
An example of a direct mail campaign:
For our purposes here I will not go into all the details of the process but you will get the idea.
We are selling men’s high end retail clothes; Cherry’s Hot Digs.
We decide we will mail to 25,000 males in a four zip code area.
The target customer is men age 25 plus, income of $70,000 a year plus, middle to upper management, and lives in affluent zip code areas of the city, etc.
We decided to advertise a special group of expensive fine wool sweaters at a 50% discount.
We decide to use post cards rather than letters for a variety of reasons.
We write a compelling headline and copy to get the attention of the reader and add attractive photographs.
We rent the mailing list for the target zip code areas. (Cost is $40 per thousand ).
We deliver the art for the printed post cards and the list reciepents on a CD to a direct mail company.
We have the printer print the post cards.
The direct mail company addresses, applies postage and mails the post cards. The date the post cards are mailed is called the drop date.
After about three days customers start to respond and we get a response rate of 2%.
Two percent of 25,000 is 500 customers. Of those let’s say three hundred customers buy and are also sold additional items for an average sale of $250 per customer.
Total revenue for the campaign is 300 respondents X $250 = $75,000. Subtract the cost of the mailing, approximately $5,000, and you have net revenue for the mailing of $70,000. Not bad for a two percent response rate.
Direct mail can be a very powerful advertising medium when used correctly. It is affordable, easy to do, you can target any group of customers, and it gets results for the businesses. If you have a business consider trying a direct mail campaign.